How to calculate interest on loan using Bajaj Finserv interest calculator?
The online monthly interest calculator ensures quick computation of interest and EMIs. Using a Bajaj Finance loan interest rate calculator is simple, with the interface being user-friendly. Here is how to use an interest rate calculator in three simple steps:
Step 1: Enter the loan amount you want to avail.
Step 2: Next, enter the rate of interest on your loan.
Step 3: Select the repayment period you wish to opt for and get accurate results instantly.
Methods of calculating interest
The two primary methods of calculating the interest are simple interest rates and compound interest rates.
Simple interest
Simple Interest is a straightforward calculation where interest is calculated solely on the principal amount.
Here’s the mathematical formula, on which a simple interest calculator works to compute the loan amount:
A = P (1+RT)
To calculate Interest Paid on a loan, the formula is
Interest = A – P.
Where,
A = Total Amount Paid
P = Principal Amount
R = Rate of Interest
T = Number of years
Compound interest
Compound interest, on the other hand, takes into account both the principal and any accumulated interest, resulting in interest being earned on the initial amount as well as on the previously earned interest.
Here’s the mathematical formula, on which a compound interest calculator works to compute the loan amount:
A = P (1 + r/n) ^ nt
To calculate Interest Paid on a loan, the formula is
Interest = A – P.
- A = Total Amount Paid
- P = Principal Amount
- R = Rate of Interest
- N = number of times interest is compounded per year
- T = Number of years
Advantages of using a loan interest rate calculator
Here are some benefits of utilising our interest calculator:
Accuracy:Provides precise calculations for interest and repayments.
Time efficiency:Swiftly generates results, saving time for borrowers.
Financial planning:Assists in planning budgets with accurate repayment estimates.
Comparison tool:Enables easy comparison of loan offers from different lenders.
Cost-effectiveness:Helps borrowers minimize overall borrowing costs.
Informed decisions:Empowers borrowers with information for decision-making.
FAQs
To calculate interest rates, use the formula: Interest = Principal × Rate × Tenure. This equation helps determine the interest rate on investments or loans.
How can I calculate interest on a loan? ›
If you have a 6 percent interest rate and you make monthly payments, you would divide 0.06 by 12 to get 0.005. Multiply that number by your remaining loan balance to find out how much you'll pay in interest that month. If you have a $5,000 loan balance, your first month of interest would be $25.
How to calculate simple interest on loan amount? ›
The formula is I = P * r * t, where I is the interest, P is the principal amount, r is the annual interest rate, and t is the time in years.
How to calculate EMI in Bajaj Finance? ›
E = P*r*(1+r)^n/((1+r)^n-1) where,
- E is EMI.
- P is the principal loan amount,
- r is the rate of interest calculated monthly, and.
- n is the tenure/ duration in months.
Simply divide your APY by 12 (for each month of the year) to find the percent interest your account earns per month. For example: A 12% APY would give you a 1% monthly interest rate (12 divided by 12 is 1). A 1% APY would give you a 0.083% monthly interest rate (1 divided by 12 is 0.083).
What is 6% interest on a $30,000 loan? ›
For example, the interest on a $30,000, 36-month loan at 6% is $2,856.
How do you calculate interest formula? ›
The formula for calculating simple interest is: Interest = P * R * T. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). T = Number of time periods (generally one-year time periods).
How is loan interest calculated with example? ›
The principal amount is Rs 10,000, the rate of interest is 10% and the number of years is six. You can calculate the simple interest as: A = 10,000 (1+0.1*6) = Rs 16,000. Interest = A – P = 16000 – 10000 = Rs 6,000.
How do you calculate simple interest for dummies? ›
To calculate simple interest, multiply the principal amount by the interest rate and the time. The formula written out is "Simple Interest = Principal x Interest Rate x Time." This equation is the simplest way of calculating interest.
What is the formula for calculating simple interest? ›
How to Calculate Simple Interest? Simple Interest is calculated using the following formula: SI = P × R × T, where P = Principal, R = Rate of Interest, and T = Time period.
₹50,000 Personal Loan EMI for up to 5 Years
| Loan Amount (₹) | Interest Rate (p.a.) | EMI (₹) |
|---|
| ₹50,000 | 10.99% | ₹ 4,418 |
| ₹ 2,330 |
| ₹1,636 |
| ₹1,292 |
2 more rowsSecured loans typically offer some of the lowest interest rates due to the collateral provided by the property. The loan is secured by the home, gold, or any vehicle, which reduces the risk for the lender.
How to calculate loan EMI manually? ›
Illustration: How is EMI on Loan Calculated?
- Formula for EMI Calculation is -
- P x R x (1+R)^N / [(1+R)^N-1] where-
- P = Principal loan amount.
- N = Loan tenure in months.
- R = Monthly interest rate.
- R = Annual Rate of interest/12/100.
A “real interest rate” is an interest rate that has been adjusted for inflation. To calculate a real interest rate, you subtract the inflation rate from the nominal interest rate. In mathematical terms we would phrase it this way: The real interest rate equals the nominal interest rate minus the inflation rate.
How do I find interest rate formula? ›
= P × R × T, Where, P = Principal, it is the amount that initially borrowed from the bank or invested. R = Rate of Interest, it is at which the principal amount is given to someone for a certain time, the rate of interest can be 5%, 10%, or 13%, etc., and is to be written as r/100.
What is the formula for interest rate of personal loan? ›
How do lenders calculate interest on a loan? tenure of 20 years/240 months and annual ROI of 6% (monthly = 0.005). Using the formula EMI = P * r * (1+r)^n/ ((1+r)^n-1), the EMI is calculated to be INR 14,329. The total amount payable is INR 14,329 * 240 = INR 34,38,960.
How do you calculate effective interest rate online? ›
The formula and calculations are as follows: Effective annual interest rate = ( 1 + ( nominal rate ÷ number of compounding periods ) ) ^ ( number of compounding periods ) - 1. Investment A = ( 1 + ( 10% ÷ 12 ) ) 12 - 1.
